Traders count losses as goods get stuck in Kenya

Ugandan traders are counting losses occasioned by delays in clearing goods both at Mombasa port in Kenya, and at the entry points at both Malaba and Busia.

The importers say several anti-Covid-19 measures have disrupted many activities, thereby impacting the movement of goods.

Although the exact figures are not known, sources privy to dealings between Uganda and Kenya say the losses could be in billions of shillings.

Mr Hussein Kiddede, the chairperson of Uganda Freight Forwarders Association, told Daily Monitor yesterday that the crisis is heightened at the borders as Uganda tests all the drivers entering the country.

“There is a delay and the last information we got was that there is a 35km stretch of trucks on the road, and this is certainly not good to the customer who is supposed to receive the goods because it means they have to wait longer. If it is a factory, it means production has to be halted,” Mr Kiddede said.

Salt to injury
Mr Kiddede said imported supplies had been dwindling for some time and Covid-19 added to their miseries.

“We had not been prepared for it [Covid-19] because it had not been expected, but we are hopeful that following the President’s directive and the engagement the private sector has had with the government in the last few days, there will be an improvement. We hope there will be some solutions and we are waiting to see how this is going to be operationalised,” he said.

In 2018, according to the port transit report, Uganda was the biggest user of Mombasa port, importing up 7.4 million metric tonnes of goods, accounting for 82 per cent of our imports.

On a normal working day, cargo from Mombasa takes three to four days to reach Kampala, but now the situation has since changed.

It has also emerged that the traders in Kampala have lost touch with their counterparts and authorities in Kenya because of the lockdown.

Mr Everest Kayondo, the chairman Kampala City Traders Association (Kacita), yesterday said they had lost communication with traders and authorities at Mombasa.

“Right now, if there are goods which are stuck during this period, I will have to contact Mombasa. My thinking is that traders are willing to clear their goods but have been failed by the logistics,” he said.
He said the problem is worsened by the fact that priority is on the essential products, which are cleared first.

He, however, said he is not sure if they are the essential goods that are stuck or not.
Ideally, on average, Kenyan authorities give transit goods a period of nine days to be cleared and shipped. After this period, traders are liable to pay demurrage worth $100 (Shs370,000) per day.

Because of accumulated demurrage, so many traders are forced to abandon their goods at Mombasa, especially after the cost of demurrage is way higher than the cost of the goods.

Mr Wilson Kanyankole, the proprietor of Maybach, a company dealing in imported cars, said the delay has had serious effects on the sale of cars and car dealers are counting losses.

He said since the lockdown was imposed, the car sales have gone down, except for ambulances and pick-up trucks, which are currently on demand.

“Normally, when we import, we have fixed number of days to transport the cars away from Mombasa, but when you have the delays, then you pay for the delays,” he said.
Asked what impact this has had on the pricing of cars on the market, Mr Kanyankole said the dealers suffer the losses.

“We bear the burden of the extra costs incurred. People already know the prices of these cars and it becomes hard to increase,” he said.

What authorities say

By press time, we could not get officials from the Uganda Revenue Authority to provide us with figures of the exact loss due to such delays.

In an interview with this newspaper recently, Trade minister Amelia Kyambadde said: “We are in a crisis and all the trucks are stuck at the border. This is not business as usual. My advice is that we give it sometime and look at these issues at least after next week.”

Asked to share insights on which particular goods are affected, Ms Kyambadde said they haven’t gone to that level yet and requested to comment on the matter further after a week.

The Kenya Ports Authority’s general manager for operations, Mr Willam Ruto, however, said at Mombasa, there is no problem.

“Cargo is moving smoothly. The population is normal and evacuation is good,” he said.
Queried further about the demurrage, Mr Ruto said: “I have not heard about that because with few vehicles on the road, the journey takes less time.”

Ideally, demurrage is charged by the shipping lines and this is computed based on the free days agreed between the consignee and the shipper.

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